Saputo acquires 52% stake in WCB

Canadian dairy company Saputo has won the bidding war for Warrnambool Cheese and Butter (WCB), announcing that it has acquired 52.7% of the company’s shares.

Having secured more than half the company’s shares, Saputo is honouring its offer to pay $9.20, rather than $9.00, per share. If the company acquires 75% of the shares, it will pay $9.40; if it acquires 90% of shares, it will pay $9.60 per share. All WCB shareholders who accept Saputo’s offer will receive the increased price for their shares, regardless of when they accept.

The offer period has been extended by two weeks to 7 pm on 4 February to give WCB shareholders more time to accept Saputo’s offer.

According to Irene Nattel, an analyst with RBC Capital Markets, the extent of Saputo’s stake in WCB depends on rival bidder Murray Goulburn, which holds a 17.7% stake in WCB.

“Given the uncertainty of approval by the Australian Competition Tribunal, we would expect Murray Goulburn to tender to Saputo while simultaneously expressing its disappointment and pointing to the windfall profit it will realise on its stake,” Nattel wrote in a report.